Item 1. Financial Statements

GoDaddy Inc.

Consolidated Balance Sheets (unaudited)

(In millions, except shares in thousands and per share amounts)

			March 31,						December 31,
			2023						2022
Assets
Current assets:
Cash and cash equivalents			$	892.4					$	774.0
Accounts and other receivables			68.7						60.1
Prepaid domain name registry fees			456.2						435.7
Prepaid expenses and other current assets			291.1						312.8
Assets held for sale			21.7						—
Total current assets			1,730.1						1,582.6
Property and equipment, net			216.0						225.6
Operating lease assets			75.1						84.1
Prepaid domain name registry fees, net of current portion			206.5						197.1
Goodwill			3,549.1						3,536.9
Intangible assets, net			1,203.4						1,252.2
Other assets			112.1						95.0
Total assets			$	7,092.3					$	6,973.5
Liabilities and stockholders' deficit
Current liabilities:
Accounts payable			$	140.0					$	130.9
Accrued expenses and other current liabilities			383.9						356.7
Deferred revenue			2,043.2						1,954.0
Long-term debt			18.3						18.2
Liabilities held for sale			13.9						—
Total current liabilities			2,599.3						2,459.8
Deferred revenue, net of current portion			795.5						770.3
Long-term debt, net of current portion			3,809.6						3,812.9
Operating lease liabilities, net of current portion			109.9						116.5
Other long-term liabilities			86.9						87.1
Deferred tax liabilities			46.6						56.2
Commitments and contingencies
Stockholders' deficit:
Preferred stock, $0.001 par value - 50,000 shares authorized; none issued and outstanding			—						—
Class A common stock, $0.001 par value - 1,000,000 shares authorized; 154,114 and 153,830 issued and outstanding as of March 31, 2023 and December 31, 2022, respectively			0.2						0.2
Class B common stock, $0.001 par value - 500,000 shares authorized; 307 and 312 issued and outstanding as of March 31, 2023 and December 31, 2022, respectively			—						—
Additional paid-in capital			1,990.5						1,912.6
Accumulated deficit			(2,489.3)						(2,422.6)
Accumulated other comprehensive income			140.7						178.0
Total stockholders' deficit attributable to GoDaddy Inc.			(357.9)						(331.8)
Non-controlling interests			2.4						2.5
Total stockholders' deficit			(355.5)						(329.3)
Total liabilities and stockholders' deficit			$	7,092.3					$	6,973.5

See accompanying notes to consolidated financial statements.

GoDaddy Inc.

Consolidated Statements of Operations (unaudited)

(In millions, except shares in thousands and per share amounts)

			Three Months Ended March 31,
			2023						2022
Revenue:
Applications & commerce			$	338.0					$	303.1
Core platform			698.0						699.6
Total revenue			1,036.0						1,002.7
Costs and operating expenses(1):
Cost of revenue (excluding depreciation and amortization)			386.1						370.2
Technology and development			215.0						190.1
Marketing and advertising			92.4						116.3
Customer care			76.8						77.7
General and administrative			94.1						90.6
Restructuring and other			52.3						—
Depreciation and amortization			48.5						48.2
Total costs and operating expenses			965.2						893.1
Operating income			70.8						109.6
Interest expense			(45.8)						(33.6)
Other income (expense), net			22.6						(1.1)
Income before income taxes			47.6						74.9
Provision for income taxes			(0.2)						(6.3)
Net income			47.4						68.6
Less: net income attributable to non-controlling interests			0.1						0.2
Net income attributable to GoDaddy Inc.			$	47.3					$	68.4
Net income attributable to GoDaddy Inc. per share of Class A common stock:
Basic			$	0.31					$	0.42
Diluted			$	0.30					$	0.41
Weighted-average shares of Class A common stock outstanding:
Basic			154,124						164,323
Diluted			156,644						166,811
___________________________
(1) Costs and operating expenses include equity-based compensation expense as follows:
Cost of revenue			$	0.4					$	0.3
Technology and development			39.0						32.9
Marketing and advertising			6.6						7.0
Customer care			5.4						4.2
General and administrative			20.2						16.8
Restructuring and other			2.3						—
Total equity-based compensation expense			$	73.9					$	61.2

See accompanying notes to consolidated financial statements.

GoDaddy Inc.

Consolidated Statements of Comprehensive Income (unaudited)

(In millions)

			Three Months Ended March 31,
			2023						2022
Net income			$	47.4					$	68.6
Foreign exchange forward contracts gain (loss), net			(6.9)						3.2
Unrealized swap gain (loss), net(1)			(32.6)						89.9
Change in foreign currency translation adjustment			2.1						(34.3)
Comprehensive income			10.0						127.4
Less: comprehensive income attributable to non-controlling interests			0.2						0.3
Comprehensive income attributable to GoDaddy Inc.			$	9.8					$	127.1
___________________________
(1) Amounts are net of the tax effects reflected below:
Unrealized swap gain (loss), net			$	—					$	(2.5)

See accompanying notes to consolidated financial statements.

GoDaddy Inc.

Consolidated Statements of Stockholders' Deficit (unaudited)

(In millions, except shares in thousands)

			Class A Common Stock												Class B Common Stock												Additional Paid-in Capital						Accumulated Deficit						Accumulated Other Comprehensive Income						Non- Controlling Interests						Total
			Shares						Amount						Shares						Amount
Balance at December 31, 2022			153,830						$	0.2					312						$	—					$	1,912.6					$	(2,422.6)					$	178.0					$	2.5					$	(329.3)
Net income			—						—						—						—						—						47.3						—						0.1						47.4
Equity-based compensation, including amounts capitalized			—						—						—						—						74.5						—						—						—						74.5
Stock option exercises			132						—						—						—						3.2						—						—						—						3.2
Repurchases of Class A common stock			(1,553)						—						—						—						—						(113.9)						—						—						(113.9)
Impact of derivatives, net			—						—						—						—						—						—						(39.5)						—						(39.5)
Change in foreign currency translation adjustment			—						—						—						—						—						—						2.1						—						2.1
Vesting of restricted stock units and other			1,705						—						(5)						—						0.2						(0.1)						0.1						(0.2)						—
Balance at March 31, 2023			154,114						$	0.2					307						$	—					$	1,990.5					$	(2,489.3)					$	140.7					$	2.4					$	(355.5)

			Class A Common Stock												Class B Common Stock												Additional Paid-in Capital						Accumulated Deficit						Accumulated Other Comprehensive Income (Loss)						Non- Controlling Interests						Total
			Shares						Amount						Shares						Amount
Balance at December 31, 2021			166,901						$	0.2					320						$	—					$	1,594.7					$	(1,474.6)					$	(38.6)					$	1.5					$	83.2
Net income			—						—						—						—						—						68.4						—						0.2						68.6
Equity-based compensation, including amounts capitalized			—						—						—						—						62.2						—						—						—						62.2
Stock option exercises			202						—						—						—						8.5						—						—						—						8.5
Repurchases of Class A common stock			(6,532)						—						—						—						—						(750.2)						—						—						(750.2)
Impact of derivatives, net			—						—						—						—						—						—						93.1						—						93.1
Change in foreign currency translation adjustment			—						—						—						—						—						—						(34.3)						—						(34.3)
Vesting of restricted stock units and other			1,115						—						(8)						—						0.2						—						(0.1)						0.1						0.2
Balance at March 31, 2022			161,686						$	0.2					312						$	—					$	1,665.6					$	(2,156.4)					$	20.1					$	1.8					$	(468.7)

See accompanying notes to consolidated financial statements.

GoDaddy Inc.

Consolidated Statements of Cash Flows (unaudited)

(In millions)

			Three Months Ended March 31,
			2023						2022
Operating activities
Net income			$	47.4					$	68.6
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			48.5						48.2
Equity-based compensation expense			73.9						61.2
Non-cash restructuring charges			21.0						—
Other			(1.1)						17.6
Changes in operating assets and liabilities, net of amounts acquired:
Prepaid domain name registry fees			(29.5)						(19.8)
Deferred revenue			114.8						94.6
Other operating assets and liabilities			(4.7)						(19.5)
Net cash provided by operating activities			270.3						250.9
Investing activities
Purchases of property and equipment			(22.8)						(12.3)
Other investing activities			—						(0.2)
Net cash used in investing activities			(22.8)						(12.5)
Financing activities
Proceeds received from:
Stock option exercises			3.2						8.5
Payments made for:
Repurchases of Class A common stock			(119.7)						(750.1)
Repayment of term loans			(6.3)						(8.1)
Other financing obligations			(1.4)						(0.9)
Net cash used in financing activities			(124.2)						(750.6)
Cash and cash equivalents classified within assets held for sale			(5.2)						—
Effect of exchange rate changes on cash and cash equivalents			0.3						(0.8)
Net increase (decrease) in cash and cash equivalents			118.4						(513.0)
Cash and cash equivalents, beginning of period			774.0						1,255.7
Cash and cash equivalents, end of period			$	892.4					$	742.7

Cash paid during the period for:
Interest on long-term debt, including impact of interest rate swaps			$	44.7					$	28.1
Income taxes, net of refunds received			$	2.2					$	4.5
Amounts included in the measurement of operating lease liabilities			$	12.1					$	13.7
Supplemental disclosure of non-cash transactions
Operating lease assets obtained in exchange for operating lease liabilities			$	1.4					$	3.0
Accrued purchases of property and equipment at period end			$	2.0					$	5.9

See accompanying notes to consolidated financial statements.

GoDaddy Inc.

Notes to Consolidated Financial Statements (unaudited)

(In millions, except shares in thousands and per share amounts)

Note 1			Organization and Background			6
Note 2			Summary of Significant Accounting Policies			7
Note 3			Goodwill and Intangible Assets			9
Note 4			Stockholders' Equity			10
Note 5			Prepaid Expenses and Other Current Assets			10
Note 6			Equity-Based Compensation Plans			11
Note 7			Deferred Revenue			12
Note 8			Accrued Expenses and Other Current Liabilities			12
Note 9			Long-Term Debt			13
Note 10			Derivatives and Hedging			14
Note 11			Leases			16
Note 12			Commitments and Contingencies			17
Note 13			Restructuring and Other Charges and Assets Held for Sale			18
Note 14			Income Taxes			19
Note 15			Income Per Share			20
Note 16			Segment Information			21
Note 17			Accumulated Other Comprehensive Income (Loss)			23

1. Organization and Background

Organization

We are the sole managing member of Desert Newco, and as a result, we consolidate its financial results and report non-controlling interests representing the economic interests held by other members. The calculation of non-controlling interests excludes any net income attributable directly to GoDaddy Inc. As of March 31, 2023, we owned approximately 99.8% of Desert Newco.

Basis of Presentation

Our financial statements have been prepared in accordance with generally accepted accounting principles in the United States (GAAP) and include our accounts and the accounts of our subsidiaries. All material intercompany accounts and transactions have been eliminated.

Our interim financial statements are unaudited, and in our opinion, include all adjustments of a normal recurring nature necessary for the fair presentation of the periods presented. The results for interim periods are not necessarily indicative of the results to be expected for any subsequent period or for the year ending December 31, 2023.

These financial statements should be read in conjunction with our audited financial statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2022 (the 2022 Form 10-K).

Prior Period Reclassifications

Reclassifications of certain immaterial prior period amounts have been made to conform to the current period presentation.

Use of Estimates

GAAP requires us to make estimates and assumptions affecting amounts reported in our financial statements. We periodically evaluate our estimates and adjust prospectively, if necessary. We believe our estimates and assumptions are reasonable; however, actual results may differ.

Segments

We report our operating results through two reportable segments: Applications and Commerce (A&C) and Core Platform (Core), as further discussed in Note 16.

2. Summary of Significant Accounting Policies

Property and Equipment

Property and equipment, net by geography was as follows:

			March 31, 2023						December 31, 2022
U.S.			$	162.7					$	167.5
France			26.8						28.8
All other international			26.5						29.3
			$	216.0					$	225.6

No other international country represented more than 10% of property and equipment, net in any period presented.

Equity Investments

We hold investments in privately held equity securities, which are recorded in other assets and totaled $54.9 million and $40.5 million at March 31, 2023 and December 31, 2022, respectively. These securities are recorded at cost and adjusted for observable transactions for same or similar investments of the same issuer or impairment. Investment gains and losses are recorded in other income (expense), net. During the three months ended March 31, 2023, we recorded a $14.4 million increase to the carrying value of one of our investments.

Valuations of privately held securities are inherently complex and require judgment due to the lack of readily available observable market data. A security's carrying value is not adjusted if there are no observable price changes in a same or similar security from the same issuer or if there are no identified events or changes in circumstances that may indicate impairment. In determining the estimated fair value of our investments, we utilize the most recent data available to us. We assess our investments for impairment at least quarterly using both qualitative and quantitative factors. If an investment is considered impaired, we recognize an impairment loss and establish a new carrying value for the investment. Our analysis did not indicate impairment of our investments as of March 31, 2023.

Revenue Recognition

Disaggregated Revenue

Revenue by major product type was as follows:

			Three Months Ended March 31,
			2023						2022
Applications and commerce			$	338.0					$	303.1
Core platform: domains			492.1						483.9
Core platform: other			205.9						215.7
			$	1,036.0					$	1,002.7

No single customer represented over 10% of our total revenue for any period presented.

Revenue by geography is based on the customer's billing address and was as follows:

			Three Months Ended March 31,
			2023						2022
U.S.			$	695.4					$	672.9
International			340.6						329.8
			$	1,036.0					$	1,002.7

No international country represented more than 10% of total revenue in any period presented.

See Note 7 for information regarding our deferred revenue.

Assets Recognized from Contract Costs

Fees paid to various registries at the inception of a domain registration or renewal represent costs to fulfill a contract. We capitalize and amortize these prepaid domain name registry fees to cost of revenue consistent with the pattern of transfer of the product to which the asset relates. Amortization expense of such asset was $185.1 million and $174.1 million for the three months ended March 31, 2023 and 2022, respectively.

Restructuring and other

Restructuring and other primarily represents charges related to the restructuring plan announced in February 2023, which was implemented to reduce future operating expenses and improve cash flows through a combination of a reduction in force and a commitment to sell certain assets and liabilities of our hosting business within our Core segment. See Note 13 for further discussion of restructuring charges pursuant to our restructuring plan as of March 31, 2023.

Assets and Liabilities Held for Sale

We classify assets and liabilities as held for sale when our management, with the appropriate authority, approves and commits to a formal plan of sale with the expectation that such sale will be completed within one year. The net assets and liabilities of a disposal group designated as held for sale are then recorded at the lower of their current carrying value or their fair market value, less costs to sell. See Note 13 for further discussion of our assets and liabilities classified as held for sale as of March 31, 2023.

Fair Value Measurements

The following tables set forth our material assets and liabilities measured and recorded at fair value on a recurring basis:

			March 31, 2023
			Level 1						Level 2						Level 3						Total
Assets:
Cash and cash equivalents:
Commercial paper			$	—					$	115.0					$	—					$	115.0
Time deposits			360.6						—						—						360.6
Derivative assets			—						168.1						—						168.1
Total assets			$	360.6					$	283.1					$	—					$	643.7
Liabilities:
Derivative liabilities			$	—					$	3.8					$	—					$	3.8
Total liabilities			$	—					$	3.8					$	—					$	3.8

			December 31, 2022
			Level 1						Level 2						Level 3						Total
Assets:
Cash and cash equivalents:
Commercial paper			$	—					$	120.0					$	—					$	120.0
Time deposits			347.3						—						—						347.3
Derivative assets			—						218.5						—						218.5
Total assets			$	347.3					$	338.5					$	—					$	685.8
Liabilities:
Derivative liabilities			$	—					$	4.9					$	—					$	4.9
Total liabilities			$	—					$	4.9					$	—					$	4.9

We have no other material assets or liabilities measured at fair value on a recurring basis.

3. Goodwill and Intangible Assets

The following table summarizes changes in our goodwill balance by segment:

			A&C						Core						Total
Balance at December 31, 2022			$	1,497.0					$	2,039.9					$	3,536.9
Impact of foreign currency translation			6.2						8.6						14.8
Goodwill reclassified to assets held for sale(1)			—						(2.6)						(2.6)
Balance at March 31, 2023			$	1,503.2					$	2,045.9					$	3,549.1

_________________________________

(1)See Note 13 for additional discussion of assets held for sale pursuant to our restructuring plan.

Intangible assets, net are summarized as follows:

			March 31, 2023
			Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount
Indefinite-lived intangible assets:
Trade names and branding			$	445.0					n/a						$	445.0
Domain portfolio			242.4						n/a						242.4
Contractual-based assets			256.8						n/a						256.8
Finite-lived intangible assets(1):
Customer-related			451.6						$	(301.8)					149.8
Developed technology			244.9						(185.0)						59.9
Trade names and other			104.0						(54.5)						49.5
			$	1,744.7					$	(541.3)					$	1,203.4

_________________________________

(1)See Note 13 for additional discussion of assets held for sale pursuant to our restructuring plan.

			December 31, 2022
			Gross Carrying Amount						Accumulated Amortization						Net Carrying Amount
Indefinite-lived intangible assets:
Trade names and branding			$	445.0					n/a						$	445.0
Domain portfolio			243.2						n/a						243.2
Contractual-based assets			256.8						n/a						256.8
Finite-lived intangible assets:
Customer-related			487.7						$	(309.0)					178.7
Developed technology			243.9						(171.1)						72.8
Trade names and other			109.8						(54.1)						55.7
			$	1,786.4					$	(534.2)					$	1,252.2

Amortization expense was $32.7 million and $33.2 million for the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, the weighted-average remaining amortization period for amortizable intangible assets was 35 months for customer-related, 31 months for developed technology and 52 months for trade names and other, and was 37 months in total.

Based on the balance of finite-lived intangible assets as of March 31, 2023, expected future amortization expense is as follows:

Year Ending December 31:
2023 (remainder of)			$	70.9
2024			81.5
2025			74.2
2026			25.0
2027			4.5
Thereafter			3.1
			$	259.2

4. Stockholders' Equity

Share Repurchases

We have authority to repurchase up to $3,000.0 million of our Class A common stock. During the three months ended March 31, 2023, we repurchased a total of 1,553 shares, of our Class A common stock in the open market, which were retired upon repurchase, for an aggregate purchase price of $113.9 million. As of March 31, 2023, we had $1,586.0 million of remaining authorization available for repurchases.

5. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

			March 31, 2023						December 31, 2022
Derivative assets			$	168.1					$	218.5
Prepaid software and maintenance expenses			44.5						29.5
Registry deposits			40.4						41.0
Usage-based prepaid expenses(1)			14.6						10.6
Other			23.5						13.2
			$	291.1					$	312.8

_________________________________

(1) Usage-based prepaid expenses include various cost of sales, marketing, rent and other prepaid commitments that are amortized as the funds are used.

6. Equity-Based Compensation Plans

We have granted stock options at exercise prices equal to the fair market value of our Class A common stock on the grant date. We have granted both stock options and restricted stock awards (RSUs) vesting solely upon the continued service of the recipient as well as performance-based awards (PSUs) with vesting based on either (i) our achievement of financial targets or (ii) our relative total stockholder return (TSR) as compared to an index of public internet companies.

The following table summarizes stock option activity:

			Number of Shares of Class A Common Stock (#)												Weighted- Average Exercise Price Per Share ($)
Outstanding at December 31, 2022			1,426												44.38
Exercised			(132)												24.17
Outstanding at March 31, 2023			1,294												46.45
Vested at March 31, 2023			1,248												45.72

The following table summarizes stock award activity:

			Number of Shares of Class A Common Stock (#)
Outstanding at December 31, 2022			7,632
Granted: RSUs			3,235
Granted: TSR-based PSUs			264
TSR-based PSU achievement above target			91
Vested			(1,700)
Forfeited			(92)
Outstanding at March 31, 2023(1)			9,430

_________________________________

(1)Includes financial-based PSUs for which performance targets have not yet been established, and which are not yet considered granted for accounting purposes. The balance of outstanding awards is comprised of the following:

			Number of Shares of Class A Common Stock (#)						Weighted-Average Grant-Date Fair Value Per Share ($)
RSUs			8,617						78.16
TSR-based PSUs			788						119.07
Financial-based PSUs not yet granted for accounting purposes			25						N/A
Outstanding at March 31, 2023			9,430

As of March 31, 2023, total unrecognized compensation expense related to non-vested equity grants was $541.4 million with an expected remaining weighted-average recognition period of 2.5 years, which excludes PSUs not yet considered granted for accounting purposes.

7. Deferred Revenue

Deferred revenue consisted of the following:

			March 31, 2023						December 31, 2022
Current:
A&C			$	664.0					$	622.1
Core			1,379.2						1,331.9
			$	2,043.2					$	1,954.0
Noncurrent:
A&C			$	175.5					$	173.1
Core			620.0						597.2
			$	795.5					$	770.3

The increase in deferred revenue is primarily driven by payments received in advance of satisfying our performance obligations, offset by $757.4 million of revenue recognized during the three months ended March 31, 2023, which was included in deferred revenue as of December 31, 2022. Deferred revenue as of March 31, 2023 represents our aggregate remaining performance obligations that will be recognized as revenue over the period in which the performance obligations are satisfied, and is expected to be recognized as revenue as follows:

			Remainder of 2023						2024						2025						2026						2027						Thereafter						Total
A&C			$	592.0					$	173.9					$	54.9					$	10.9					$	4.3					$	3.5					$	839.5
Core			1,189.7						478.5						152.0						76.7						43.5						58.8						1,999.2
			$	1,781.7					$	652.4					$	206.9					$	87.6					$	47.8					$	62.3					$	2,838.7

8. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

			March 31, 2023						December 31, 2022
Accrued payroll and employee benefits			$	105.0					$	116.3
Tax-related accruals			57.0						42.8
Accrued legal and professional			33.3						34.3
Accrued acquisition-related expenses and acquisition consideration payable			28.8						26.2
Current portion of operating lease liabilities			28.7						33.3
Accrued restructuring costs			20.7						—
Accrued marketing and advertising			18.5						13.6
Derivative liabilities			3.8						4.9
Other			88.1						85.3
			$	383.9					$	356.7

9. Long-Term Debt

Long-term debt consisted of the following:

			Maturity Date						March 31, 2023						December 31, 2022
2027 Term Loans (effective interest rate of 6.9% at March 31, 2023 and 4.3% at December 31, 2022)			August 10, 2027						$	729.4					$	731.3
2029 Term Loans (effective interest rate of 8.3% at March 31, 2023 and 4.1% at December 31, 2022)			November 10, 2029						1,765.6						1,770.0
2027 Senior Notes (effective interest rate of 5.5% at March 31, 2023 and 5.4% at December 31, 2022)			December 1, 2027						600.0						600.0
2029 Senior Notes (effective interest rate of 3.7% at March 31, 2023 and 3.6% at December 31, 2022)			March 1, 2029						800.0						800.0
Revolver			August 10, 2027						—						—
Total									3,895.0						3,901.3
Less: unamortized original issue discount and debt issuance costs(1)									(67.1)						(70.2)
Less: current portion of long-term debt									(18.3)						(18.2)
									$	3,809.6					$	3,812.9

_________________________________

(1)Original issue discount and debt issuance costs are amortized to interest expense over the life of the related debt instruments using the interest method.

Credit Facility

As described in our 2022 Form 10-K, our secured credit agreement (the Credit Facility) includes two tranches of term loans (the 2027 Term Loans and the 2029 Term Loans) and a revolving credit facility (the Revolver). A portion of the term loans is hedged by interest rate swap arrangements, as discussed in Note 10.

As of March 31, 2023, we had $1,000.0 million available for borrowing under the Revolver and we were not in violation of any covenants of the Credit Facility.

Senior Notes

As described in our 2022 Form 10-K, we have completed two offerings of senior notes (the 2027 Senior Notes and the 2029 Senior Notes).

As of March 31, 2023, we were not in violation of any covenants of the senior notes.

Fair Value

The estimated fair values of our long-term debt instruments are based on observable market prices for these loans, which are traded in less active markets and therefore classified as Level 2 fair value measurements, and were as follows as of March 31, 2023:

2027 Term Loans			$	727.6
2029 Term Loans			$	1,765.6
2027 Senior Notes			$	586.0
2029 Senior Notes			$	694.2

Future Debt Maturities

Aggregate principal payments, exclusive of any unamortized original issue discount and debt issuance costs, due on long-term debt as of March 31, 2023 were as follows:

Year Ending December 31:
2023 (remainder of)			$	18.9
2024			25.2
2025			25.2
2026			25.2
2027			1,319.0
Thereafter			2,481.5
			$	3,895.0

10. Derivatives and Hedging

We utilize the following derivative instruments designated as cash flow hedges:

• foreign exchange forward contracts to hedge certain forecasted sales transactions denominated in foreign currencies;

• cross-currency swaps used to manage variability due to movements in foreign currency exchange rates related to a Euro-denominated intercompany loan; and

• pay-fixed rate, receive-floating rate interest rate swaps to effectively convert portions of our variable-rate debt to fixed.

We also utilize cross-currency swaps designated as net investment hedges to mitigate the risk associated with exchange rate fluctuations on our net investment in certain foreign operations.

The following table summarizes our outstanding derivative instruments on a gross basis, all of which are considered Level 2 financial instruments:

			Notional Amount												Fair Value of Derivative Assets**(2)**												Fair Value of Derivative Liabilities**(2)**
			March 31, 2023						December 31, 2022						March 31, 2023						December 31, 2022						March 31, 2023						December 31, 2022
Cash flow hedges:
Foreign exchange forward contracts			$	361.5					$	364.7					$	4.9					$	9.4					$	3.8					$	2.0
Cross-currency swaps(1)			555.3						549.7						10.8						15.8						—						2.2
Interest rate swaps			1,975.3						1,980.5						138.5						173.0						—						—
Net investment hedges:
Cross-currency swaps(1)			711.8						704.6						13.9						20.3						—						0.7
Total hedges			$	3,603.9					$	3,599.5					$	168.1					$	218.5					$	3.8					$	4.9

_________________________________

(1)The notional values of the cross-currency swaps have been translated from Euros to U.S. dollars at the foreign currency rates in effect of approximately 1.08 and 1.07 as of March 31, 2023 and December 31, 2022, respectively.

(2)In our balance sheets, all derivative assets are recorded within prepaid expenses and other current assets and all derivative liabilities are recorded within accrued expenses and other current liabilities.

The following table summarizes the effect of our hedging relationships on accumulated other comprehensive income (AOCI):

			Unrealized Gains (Losses) Recognized in Other Comprehensive Income
			Three Months Ended
			March 31, 2023						March 31, 2022
Cash flow hedges:
Foreign exchange forward contracts(1)			$	(6.9)					$	3.2
Cross-currency swaps			2.0						36.3
Interest rate swaps			(34.6)						51.1
Net investment hedges:
Cross-currency swaps			(6.4)						(26.4)
Total hedges			$	(45.9)					$	64.2

_________________________________

(1)Amounts include gains and losses realized upon contract settlement but not yet recognized into earnings from AOCI.

The following table summarizes the locations and amounts of gains (losses) recognized within earnings related to our hedging relationships:

			Three Months Ended March 31, 2023																		Three Months Ended March 31, 2022
			Revenue						Interest Expense						Other Income (Expense), Net						Revenue						Interest Expense						Other Income (Expense), Net
Cash flow hedges:
Foreign exchange forward contracts:
Reclassified from AOCI into income			$	4.8					$	—					$	—					$	(1.6)					$	—					$	—
Cross-currency swaps:
Reclassified from AOCI into income(1)			—						2.4						(7.1)						—						6.1						22.5
Interest rate swaps:
Reclassified from AOCI into income			—						14.1						—						—						(10.8)						—
Net investment hedges:
Cross-currency swaps:
Reclassified from AOCI into income			—						3.2						—						—						0.8						—
Total hedges			$	4.8					$	19.7					$	(7.1)					$	(1.6)					$	(3.9)					$	22.5

_________________________________

(1)The amounts reflected in other income (expense), net include $7.0 million and $(22.7) million reclassified from AOCI to offset the earnings impact of the remeasurement of the Euro-denominated intercompany loan hedged by cross-currency swaps during the three months ended March 31, 2023 and 2022, respectively.

As of March 31, 2023, we estimate that $72.6 million of net deferred gains related to our designated hedges will be recognized in earnings over the next 12 months. No amounts have been excluded from our hedge effectiveness testing.

Risk Management Strategies

Foreign Exchange Forward Contracts

From time-to-time, we may enter into foreign exchange forward contracts with financial institutions to hedge certain forecasted sales transactions denominated in foreign currencies. We designate these forward contracts as cash flow hedges, which are recognized as either assets or liabilities at fair value. At March 31, 2023, all such contracts had maturities of 18 months or less.

Cross-Currency Swaps

In April 2017, in order to manage variability due to movements in foreign currency rates related to a Euro-denominated intercompany loan, we entered into five-year cross-currency swaps. In March 2022, we entered into a transaction to extend the maturity of these swaps to August 31, 2027. We and the existing counterparties executed cancellation agreements to terminate all rights, obligations and liabilities associated with the original swaps. On the modification date, the existing cash flow hedging relationships were de-designated and new hedging relationships incorporating the terms of the new swaps (the 2022 Cross-Currency Swaps) were designated as either cash flow hedging relationships or net investment hedging relationships. The 2022 Cross-Currency Swaps had an aggregate amortizing notional amount of €1,184.2 million at inception (approximately $1,262.5 million). The swaps designated as cash flow hedging relationships convert the 3.00% fixed rate Euro-denominated interest and principal receipts on the intercompany loan into U.S. dollar interest and principal receipts at a fixed rate of 4.81%. The swaps designated as net investment hedging relationships hedge the foreign currency exposure of our net investment in certain Euro denominated functional currency subsidiaries. Pursuant to the contracts, the Euro notional value will be exchanged for the U.S. dollar notional value at maturity.

Interest Rate Swaps

In April 2017, we entered into a five-year pay-fixed rate, receive-floating rate interest rate swap arrangement to effectively convert a portion of the variable-rate borrowings under the 2024 Term Loans to a fixed rate of 5.44%. In March 2022, we entered into a transaction to extend the maturity of the swaps to August 31, 2027. We and the existing counterparties executed cancellation agreements to terminate all rights, obligations and liabilities associated with the original swaps. On the modification date, the existing cash flow hedging relationships were de-designated and new hedging relationships incorporating the terms of the new interest rate swaps (the 2022 Interest Rate Swaps) were designated. The 2022 Interest Rate Swaps, which had an amortizing notional amount of $1,262.5 million at inception, serve to convert a portion of the variable-rate borrowings under the 2029 Term Loans to a fixed rate of 4.81%. In November 2022, in conjunction with the Credit Facility refinancing discussed in our 2022 Form 10-K, we terminated these swaps and entered into new SOFR-based interest rate swaps. This modification impacted no critical terms other than the reference rate change from LIBOR to SOFR and thus had no impact on our hedging relationships or financial results.

In August 2020, in conjunction with the issuance of the 2027 Term Loans, we entered into seven-year pay-fixed rate, receive-floating rate interest rate swaps to effectively convert the variable one-month LIBOR interest rate on the 2027 Term Loans borrowings to a fixed rate of 0.705%. These interest rate swaps, which mature on August 10, 2027, had an aggregate notional amount of $750.0 million at inception.

The objective of these arrangements, which are designated as cash flow hedges and recognized as assets or liabilities at fair value, is to manage the variability of cash flows in the interest payments related to the portion of the variable-rate debt designated as being hedged. The unrealized gains and losses on the swaps are included in AOCI and will be recognized in earnings within or against interest expense when the hedged interest payments are accrued each month.

11. Leases

Our operating leases primarily consist of office and data center space expiring at various dates through November 2036. Certain leases include options to renew or terminate at our discretion. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. As of March 31, 2023, operating leases have a remaining weighted average lease term of 6.9 years and our operating lease liabilities were measured using a weighted average discount rate of 5.3%.

The components of operating lease expense were as follows:

			Three Months Ended
			March 31, 2023						March 31, 2022
Operating lease costs			$	9.8					$	12.8
Variable lease costs			3.8						2.7
Sublease income			(2.3)						(1.8)
Total net lease cost			$	11.3					$	13.7

12. Commitments and Contingencies

Litigation

From time-to-time, we are a party to litigation and subject to claims, suits, regulatory and government investigations, other proceedings and consent decrees in the ordinary course of business, including intellectual property claims, putative and certified class actions, commercial and consumer protection claims, labor and employment claims, breach of contract claims and other asserted and unasserted claims. We investigate claims as they arise and accrue estimates for resolution of legal and other contingencies when losses are probable and reasonably estimable.

As described in our 2022 Form 10-K, as of December 31, 2022, we had accrued $8.1 million as our estimated loss provision related to the settlement of certain class action complaints alleging violation of the Telephone Consumer Protection Act of 1991. On January 19, 2021, a single objector to the settlement filed a notice of appeal to the 11th Circuit Court of Appeals (the 11th Circuit). On July 27, 2022, the 11th Circuit vacated the settlement approval order and remanded the case for further action due to standing issues among the class members. On August 18, 2022, the plaintiffs filed a petition for a rehearing before the 11th Circuit. On December 7, 2022, the 11th Circuit was notified of the death of one of the plaintiffs, Jason Bennett. The parties are currently briefing the effect, if any, of his death on the appeal. On March 13, 2023, the 11th Circuit granted the plaintiffs' petition for a rehearing before the 11th Circuit. Given the pending nature of the rehearing, and the possibility for one or more parties to seek relief from the Supreme Court, the finality and/or impact of the July 27, 2022 decision is uncertain. As a result, we have not adjusted our estimated loss provision for this settlement as of March 31, 2023.

We have denied and continue to deny the allegations in the complaints. Nothing in the final settlement agreement is deemed to assign or reflect any admission of fault, wrongdoing or liability, or of the appropriateness of a class action in such litigation. We received a full release from the settlement class concerning the claims asserted, or that could have been asserted, with respect to the claims released in the final settlement agreement. Our legal fees associated with this matter have been recorded to general and administrative expense as incurred and were not material.

As more fully described in the section titled “Risk Factors” located elsewhere in this Quarterly Report, in March 2020, we discovered that a threat actor had compromised the hosting login credentials of certain of our customers to their hosting accounts and the login credentials of a small number of our personnel. We have expended resources investigating and responding to this activity, notified the impacted customers, reported the activity to applicable regulatory authorities, and are responding to requests for information regarding our data privacy and security practices, including from the Federal Trade Commission (FTC) pursuant to Civil Investigative Demands issued in July 2020 and October 2021. The timing of resolution and the outcome of these matters are uncertain and could result in us being subject to substantial monetary or other costs to our business.

The amounts currently accrued for other matters are not material. While the results of such normal course claims and legal proceedings, regardless of the underlying nature of the claims, cannot be predicted with certainty, management believes, based on current knowledge and the likely timing of resolution of various matters, any additional reasonably possible potential losses above the amounts accrued for such matters would not be material. However, the outcomes of claims, legal proceedings or investigations are inherently unpredictable and subject to uncertainty, and may have an adverse effect on us because of defense costs, diversion of management resources and other factors that are not known to us or cannot be quantified at this time. We may also receive unfavorable preliminary or interim rulings in the course of litigation, and there can be no assurances that favorable final outcomes will be obtained. The final outcome of any current or future claims or lawsuits could adversely affect our business, financial condition or results of operations. We periodically evaluate developments in our legal matters that could affect the amount of liability that has been previously accrued or the reasonably possible losses that we have disclosed, and make adjustments as appropriate.

Indirect Taxes

We are subject to indirect taxation in some, but not all, of the various states and foreign jurisdictions in which we conduct business. Laws and regulations attempting to subject communications and commerce conducted over the Internet to various indirect taxes are becoming more prevalent, both in the U.S. and internationally, and may impose additional burdens on us in the future. Increased regulation could negatively affect our business directly, as well as the businesses of our customers. Taxing authorities may impose indirect taxes on the Internet-related revenue we generate based on regulations currently being applied to similar, but not directly comparable, industries. There are many transactions and calculations where the ultimate indirect tax determination is uncertain. In addition, domestic and international indirect taxation laws are complex and subject to change. We may be audited in the future, which could result in changes to our indirect tax estimates. We continually evaluate those jurisdictions in which nexus exists, and believe we maintain adequate indirect tax accruals.

Our accrual for estimated indirect tax liabilities was $18.9 million as of both March 31, 2023 and December 31, 2022, reflecting our best estimate of the probable liability based on an analysis of our business activities, revenues subject to indirect taxes and applicable regulations. Although we believe our indirect tax estimates and associated liabilities are reasonable, the final determination of indirect tax audits, litigation or settlements could be materially different than the amounts established for indirect tax contingencies.

13. Restructuring and Other Charges and Assets and Liabilities Held for Sale

In February 2023, we announced a restructuring plan to reduce future operating expenses and improve cash flows through a combination of a reduction in force and a commitment to sell certain assets. As part of this plan, we announced a reduction in our current workforce of approximately 550 employees, representing approximately 8% of our total employees. During the three months ended March 31, 2023, we recorded $50.4 million of pre-tax restructuring charges in our statements of operations related to the restructuring plan. The aggregate charges primarily include $29.4 million in severance, employee benefits and equity-based compensation, and a $21.0 million charge in connection with the planned disposition of certain assets, as described below. We estimate that we will incur up to an additional $5.5 million in restructuring charges primarily during the second quarter of 2023. We do not expect to incur additional restructuring charges beyond the fourth quarter of 2023.

Cash payments of $6.4 million related to the restructuring were made during the three months ended March 31, 2023.

The following table shows the total amount incurred and the accrued restructuring costs, which are recorded in accrued expenses and other current liabilities in our balance sheet, for severance and employee benefits as of March 31, 2023:

			Accrued Restructuring Costs
Accrued restructuring costs as of December 31, 2022			$	—
Restructuring costs incurred during the three months ended March 31, 2023(1)			27.1
Amount paid during the three months ended March 31, 2023			(6.4)
Accrued restructuring costs as of March 31, 2023			$	20.7

________________________________

(1)Excludes $2.3 million in equity-based compensation expense associated with our restructuring plan, which was recorded within additional paid-in capital.

We expect to make substantially all remaining restructuring payments in the second and third quarters of 2023.

In connection with the restructuring, we committed to a formal plan to sell certain assets and liabilities of our hosting business within our Core segment, which we expect to close during the second half of 2023. Accordingly, we have separately presented these assets and liabilities as held for sale in our balance sheet. The table below provides a reconciliation of the carrying amounts of the major classes of assets and liabilities held for sale to the amounts presented in our balance sheet.

			March 31, 2023
Assets:
Cash			$	5.2
Goodwill			2.6
Intangible assets			18.2
Property and equipment			7.9
Other assets			8.8
Total assets			$	42.7
Valuation allowance(1)			(21.0)
Total assets held for sale			$	21.7
Liabilities:
Accrued expenses			5.4
Deferred tax liabilities			4.8
Other liabilities			3.7
Total liabilities held for sale			$	13.9
Net assets held for sale			$	7.8

_________________________________

(1) Upon classification as held for sale, we recognized a valuation allowance of $21.0 million to adjust the carrying value of the disposal group to fair value less cost to sell.

14. Income Taxes

We are subject to U.S. federal, state and foreign income taxes with respect to our allocable share of any taxable income or loss of Desert Newco, as well as any stand-alone income or loss we generate. Desert Newco is treated as a partnership for U.S. income tax purposes, and for most applicable state and local income tax purposes, and generally does not pay income taxes in most jurisdictions. Instead, Desert Newco's taxable income or loss is passed through to its members, including us. Despite its partnership treatment, Desert Newco is liable for income taxes in certain foreign jurisdictions in which it operates, in those states not recognizing its pass-through status and for certain of its subsidiaries not taxed as pass-through entities. We have acquired the outstanding stock of various domestic and foreign entities taxed as corporations, which are now wholly-owned by us or our subsidiaries. Where required or allowed, these subsidiaries also file and pay tax as a consolidated group for U.S. federal and state income tax purposes and internationally, primarily within the United Kingdom (UK), Germany and India. We anticipate this structure to remain in existence for the foreseeable future.

Our effective tax rates differ from the U.S. federal statutory rate primarily due to changes in valuation allowances based on current year earnings and the impact of foreign earnings primarily related to the United Kingdom, Germany and India jurisdictions.

In determining the need for a valuation allowance, we prepare quarterly estimates using historical and forecasted future operating results, based upon approved business plans, including a review of the eligible carryforward periods and tax planning strategies. Based primarily on the negative evidence outweighing the positive evidence as of March 31, 2023, we believe there is uncertainty as to when we will be able to utilize certain of our domestic net operating losses (NOLs), credit carryforwards and other deferred tax assets (DTAs). This negative evidence includes our historical tax losses, the difficulty in forecasting excess tax benefits related to equity-based compensation and the difficulty in forecasting profits due to the current uncertain macroeconomic conditions, such as inflation and the possibility of recession or an economic slowdown. Therefore, we have recorded a valuation allowance against the DTAs for which we have concluded it is more-likely-than-not they will not be realized.

If the current uncertain macroeconomic conditions dissipate making it easier to forecast in the long-term, our operating results continue to improve and our projections show sufficient utilization of tax attributes, we will consider that as significant positive evidence and our future reassessment may result in the determination that all or a portion of the valuation allowance is no longer required. If this were to occur, any reversal of the valuation allowance would result in a corresponding non-cash income tax benefit, thereby increasing total DTAs.

Uncertain Tax Positions

The total amount of gross unrecognized tax benefits was $144.2 million as of March 31, 2023, of which $42.5 million, if fully recognized, would decrease our effective tax rate. Although we believe the amounts reflected in our tax returns substantially comply with applicable U.S. federal, state and foreign tax regulations, the respective taxing authorities may take contrary positions based on their interpretation of the law. A tax position successfully challenged by a taxing authority could result in an adjustment to our provision or benefit for income taxes in the period in which a final determination is made.

15. Income Per Share

Basic income per share is computed by dividing net income attributable to GoDaddy Inc. by the weighted-average number of shares of Class A common stock outstanding during the period. Diluted income per share is computed giving effect to all potentially dilutive shares unless their effect is antidilutive.

A reconciliation of the numerator and denominator used in the calculation of basic and diluted income per share is as follows:

			Three Months Ended March 31,
			2023						2022
Numerator:
Net income			$	47.4					$	68.6
Less: net income attributable to non-controlling interests			0.1						0.2
Net income attributable to GoDaddy Inc.			$	47.3					$	68.4
Denominator:
Weighted-average shares of Class A common stock outstanding—basic			154,124						164,323
Effect of dilutive securities:
Class B common stock			309						313
Stock options			535						822
RSUs, PSUs and ESPP shares			1,676						1,353
Weighted-average shares of Class A Common stock outstanding—diluted			156,644						166,811
Net income attributable to GoDaddy Inc. per share of Class A common stock—basic			$	0.31					$	0.42
Net income attributable to GoDaddy Inc. per share of Class A common stock—diluted(1):			$	0.30					$	0.41

_________________________________

(1)The diluted income per share calculations exclude net income attributable to non-controlling interests unless the effect is antidilutive.

The following number of weighted-average potentially dilutive shares were excluded from the calculation of diluted income per share because the effect of including such potentially dilutive shares would have been antidilutive:

			Three Months Ended March 31,
			2023						2022
Accelerated share repurchase agreement (ASR) shares(1)			—						2,814
Stock options			20						280
RSUs, PSUs and ESPP shares			554						1,922
			574						5,016

_________________________________

(1)If the ASRs had been settled as of March 31, 2022, based on the volume-weighted average price per share since their effective date, the counterparties would have been required to deliver these additional estimated shares to us.

Shares of Class B common stock are not participating securities, and therefore, do not have rights to share in our earnings. Accordingly, separate presentation of income per share of Class B common stock under the two-class method is not required. Each share of Class B common stock is exchangeable for one share of Class A common stock.

16. Segment Information

We report our operating results through two reportable segments: A&C and Core.

Our chief operating decision maker (CODM), which, as of March 31, 2023, was our Chief Executive Officer, evaluates the performance of and allocates resources to our segments based on each segment's revenue and earnings before interest, taxes, depreciation and amortization (Segment EBITDA). Segment EBITDA is defined as segment revenues less costs and operating expenses, excluding depreciation and amortization, interest expense (net), provision or benefit for income taxes, equity-based compensation expense, acquisition-related costs, restructuring-related expenses and certain other items. We believe Segment EBITDA serves as a measure that assists our CODM and our investors in comparing our segments' performance on a consistent basis.

Our CODM does not use assets by segment to evaluate performance or allocate resources; therefore, we do not provide disclosure of assets by segment. See Note 2 for property, plant, and equipment, net as well as revenue disaggregated by geography.

The A&C and Core segments provide a view into the product-focused organization of our business and generate revenue as follows:

• A&C primarily consists of sales of products containing proprietary software, commerce products and third-party email and productivity solutions as well as sales of certain products when they are included in bundled offerings of our proprietary software products.

• Core primarily consists of sales of domain registrations and renewals, aftermarket domain sales, website hosting products and website security products when not included in bundled offerings of our proprietary software products as well as sales of products not containing a software component.

There are no internal revenue transactions between our reportable segments.

Corporate overhead primarily includes general and administrative expenses and items not allocated to either segment as well as those costs specifically excluded from Segment EBITDA, our segment measure of profitability, such as depreciation and amortization, interest expense and income and provision or benefit for income taxes.

The following table presents our segment information for the periods indicated:

			Three Months Ended March 31,
			2023						2022
Revenue:
A&C			$	338.0					$	303.1
Core			698.0						699.6
Total revenue			$	1,036.0					$	1,002.7
Segment EBITDA:
A&C			$	132.4					$	119.8
Core			189.0						178.4
Total Segment EBITDA			321.4						298.2
Unallocated corporate overhead			(71.7)						(72.3)
Depreciation and amortization			(48.5)						(48.2)
Equity-based compensation expense(1)			(71.6)						(61.2)
Interest expense, net of interest income			(38.0)						(33.2)
Acquisition-related expenses			(5.0)						(7.7)
Restructuring and other (2)			(39.0)						(0.7)
Income before income taxes			47.6						74.9
Provision for income taxes			(0.2)						(6.3)
Net income			$	47.4					$	68.6

_________________________________

(1)Excludes $2.3 million of equity-based compensation expense associated with our restructuring plan, which is included within restructuring and other.

(2)In addition to the restructuring and other in our statements of operations, this includes lease-related expenses associated with closed facilities, charges related to certain legal matters and adjustments to the fair value of our equity investments.

17. Accumulated Other Comprehensive Income (Loss)

The following table presents AOCI activity in equity:

			Foreign Currency Translation Adjustments						Net Unrealized Gains (Losses) on Cash Flow Hedges**(1)**						Total AOCI
Gross balance as of December 31, 2022(2)			$	(75.0)					$	253.4					$	178.4
Other comprehensive income (loss) before reclassifications			2.1						(56.9)						(54.8)
Amounts reclassified from AOCI			—						17.4						17.4
Other comprehensive income (loss)			2.1						(39.5)						(37.4)
			$	(72.9)					$	213.9					141.0
Less: AOCI attributable to non-controlling interests															(0.3)
Balance as of March 31, 2023															$	140.7
Gross balance as of December 31, 2021(2)			$	(52.9)					$	14.2					$	(38.7)
Other comprehensive income (loss) before reclassifications			(35.1)						76.9						41.8
Amounts reclassified from AOCI			0.8						16.2						17.0
Other comprehensive income			(34.3)						93.1						58.8
			$	(87.2)					$	107.3					20.1
Less: AOCI attributable to non-controlling interests															—
Balance as of March 31, 2022															$	20.1

_________________________________

(1)Amounts shown for our foreign exchange forward contracts include gains and losses realized upon contract settlement but not yet recognized into earnings from AOCI.

(2)Beginning balance is presented on a gross basis, excluding the allocation of AOCI attributable to non-controlling interests.

See Note 10 for the effect on net income of amounts reclassified from AOCI related to our hedging relationships.